Fed Chair Race Heats Up: Trump’s Shortlist Includes Two Kevins

Trump Narrows Fed Chair Selection to Four Finalists as Policy Shift Looms

President Donald Trump revealed on Tuesday that he is down to four finalists for the next Chair of the Federal Reserve, a position that holds enormous sway over U.S. economic policy. In a brief but revealing statement, the President said the list includes "two Kevins and two others," sparking immediate speculation among analysts and Washington insiders alike.

While the President declined to name the remaining two contenders, multiple sources close to the matter believe that the top four candidates include former White House economic adviser Kevin Hassett and former Federal Reserve Governor Kevin Warsh. The other possible nominees are thought to be Christopher Waller, a current Fed Governor known for his conservative monetary stance, and Larry Kudlow, who served as Trump’s chief economic adviser during his first term. Another name circulating among insiders is Scott Bessent, a longtime Trump ally with Wall Street experience, seen as a strong candidate for both Fed and Treasury roles.

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This announcement comes at a critical time for the Federal Reserve, as economic pressures mount and the central bank faces increasing political scrutiny. Market watchers and financial analysts are reading Trump’s latest moves as a clear indication that he intends to reshape the Federal Reserve’s direction toward a more dovish monetary policy.

A Strategic Reshaping of the Fed

Trump’s effort to install a more aligned Fed leadership follows a pattern of direct action aimed at altering the course of the U.S. central bank. Just last week, Trump abruptly dismissed the Commissioner of the Bureau of Labor Statistics (BLS) after the agency released revised job figures showing 258,000 fewer positions than initially reported. The July jobs report also came in weaker than expected, casting doubts over the strength of the labor market.

Ironically, while the President criticized the agency, the soft data actually bolsters his argument for a rate cut. The Federal Reserve has long maintained that it would only lower interest rates if inflation decreases significantly or if the labor market shows signs of deterioration. With recent data indicating the latter, markets are now pricing in a high probability of a rate cut in the September policy meeting.

According to the CME FedWatch Tool, traders are currently betting with 87% confidence that the central bank will reduce rates next month.

Kugler Resigns Amid Power Struggle

Adding to the drama, Federal Reserve Governor Adriana Kugler announced her resignation late last week, a move that took many in Washington by surprise. Kugler’s term was scheduled to run through January 2026, but her departure opens up another seat on the Fed’s powerful Board of Governors. Trump publicly welcomed her resignation, saying it "paves the way for fresh leadership more aligned with America's economic interests."

The President’s growing influence over the Fed's board could shift the institution toward a more politically responsive posture, particularly when it comes to lowering interest rates. Critics argue that such changes threaten the Federal Reserve's long-standing independence, a principle designed to insulate monetary policy from political agendas.

Mounting Pressure on Chair Jerome Powell

With these recent moves, speculation has intensified over the fate of current Fed Chair Jerome Powell. Trump has escalated his public criticism of Powell, recently labeling him "too political" and "too slow" in a series of posts on social media.

Although the President lacks the direct authority to fire the Fed Chair, his tactics are widely seen as attempts to pressure Powell into stepping down voluntarily. During the most recent Federal Open Market Committee (FOMC) meeting on July 30, the board voted 9-2 to maintain interest rates at 4.50%, marking the most divided vote in over three decades.

Powell defended the decision, emphasizing that the Fed would not be influenced by political considerations and would act only when economic data justified such moves. "Our decisions are guided by economic indicators, not political cycles," Powell said.

Market Implications: Crypto and Beyond

The stakes of Trump’s Fed chair pick extend far beyond traditional financial markets. The cryptocurrency sector, which has seen massive gains in recent years, is particularly sensitive to interest rate changes.

As of August 6, 2025, the total global cryptocurrency market capitalization stands at $3.72 trillion, a 1% decline from the previous day. Bitcoin is currently trading at $114,019, while Ethereum has dipped by 1.55%, according to CoinMarketCap.

Market analysts suggest that a Trump-aligned Fed chair could accelerate the timeline for interest rate cuts, which would likely weaken the U.S. dollar. A weaker dollar traditionally boosts demand for alternative assets like cryptocurrencies and precious metals.

"If the Fed adopts a more accommodative stance, we could see significant upward momentum in Bitcoin and Ethereum," said Rachel Kim, a senior analyst at Digital Horizon Research.

A Turning Point Ahead of 2026 Elections

Trump’s moves are widely viewed as part of a broader strategy to prime the U.S. economy ahead of the 2026 election cycle. With inflation appearing to ease and job growth slowing, the conditions may be aligning for a dovish shift in monetary policy.

By gaining greater control over key positions within the Federal Reserve, Trump appears poised to tilt the balance in favor of rate cuts, a move that could stimulate borrowing, investment, and market confidence.

However, such a shift is not without risks. Loosening monetary policy too soon could reignite inflationary pressures, particularly if global supply chains remain volatile or geopolitical tensions escalate. Moreover, any perception that the Federal Reserve is bowing to political pressure could undermine investor trust in the institution.

Conclusion: All Eyes on the Next Fed Chair

As President Trump inches closer to announcing his pick for the next Fed Chair, the financial world is watching with heightened anticipation. Whether he selects a seasoned insider like Kevin Warsh or a loyal adviser like Larry Kudlow, the choice will have far-reaching consequences for the direction of U.S. economic policy.

The coming weeks will be critical, not only for the Federal Reserve but also for markets around the globe. With the potential for rate cuts looming and political dynamics shifting rapidly, investors, economists, and everyday Americans alike are bracing for what could be a transformative period in monetary policy.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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